Budget Day is October 1

BUDGET Day is October 1, the day the Petrotrin refinery closes and thousands of employees are placed on the breadline.

Finance Minister Colm Imbert will present the 2018/209 budget to Parliament at 1.30 pm, the Ministry of Finance announced today in a one-sentence statement.

Imbert is expected to detail a plan on the way forward for Petrotrin, as an estimated 4,300 workers are to be terminated across all business units of the state-owned oil company, with the majority at the refinery due to be wound up on the same day.

Government has said the country loses billions yearly due to underproduction at the refinery. It has already said Petrotrin will move out of the refining and marketing business and focus on exploration and production in a new company.

It will also likely be another deficit budget. In the 2017/2018 fiscal year, $50 billion was set as expenditure, with revenue at $45 billion, pegged on an oil price of US$52 a barrel, with natural gas at US$2.75 per mmbtu.

In his mid-year budget review back in May, Imbert said the economy was improving because of increased natural gas output in the last quarter of 2017, and announced then an adjustment in the gross domestic product by nine per cent to $168 billion. He said growth rate had improved from -2.6 per cent to -1.0 percent, and forecast a continued turnaround.

While the exact contents of the budget are unknown, former PNM government minister Mariano Browne said Petrotrin will feature in it. He explained that Petrotrin, National Gas Corporation (NGC) and British Petroleum (BP) were the three biggest taxpayers in TT.

On the oil and gas prices which the budget is pegged against, Browne said the gas price is the more important price. In the 2017/2018 fiscal year, $50 billion was set as expenditure, with revenue at $45 billion, pegged on an oil price of US$52 per barrel, with natural gas at US$2.75 per mmbtu.

He believed this will be another deficit budget and the budget would not be balanced even by 2021. Browne said there may be a small increase in revenue but the country will still be in a tight expenditure situation.

Former UNC energy minister Kevin Ramnarine expected the budget debate will be anchored in the energy sector and specifically Petrotrin. He agreed with Browne that the gas price the budget is pegged against is more important than the oil price. Ramnarine said while Petrotrin provided $20 billion in revenue to TT between 2010 and 2016, the country can no longer look forward to this.

In terms of performance, Ramnarine said the NGC has been the main source of revenue in terms of corporation tax. He also said Petrotrin accounts for six per cent of the energy sector’s production while BP accounts for 53 per cent.

Ramnarine said the Prime Minister, Imbert and Energy Minister Franklin Khan will have to clearly spell out in the budget what are the Government’s plans for Petrotrin.

With the budget being an exercise in public accounting and a policy statement, Ramnarine said this is important because it is clear that government has already made its decision on Petrotrin. Ramnarine expressed concern that TT’s foreign reserves had fallen. He hoped Imbert would address this matter in his presentation.